Singapore Exchange, Southeast Asia’s biggest bourse operator, suspended the trading of Blumont Group, LionGold Corp and Asiasons Capital after shares of the commodity investors plunged.
Blumont, which invests in minerals and energy resources, tumbled 56% to 88 cents, the second-biggest decliner on the FTSE ST All-Share Index, before the trading suspension. The company said today it will issue new shares at $2.02 to fund the acquisition of an unnamed coal company traded overseas for as much as $145.9 million.
Asiasons, which last month bought a stake in Black Elk Energy Offshore Operations LLC, a US-based oil and gas producer, plunged 61% to $1.04, the steepest decline on the gauge. LionGold, which said last month it was in talks to buy as many as three gold mines, slumped 42% to 87.5 cents.
Trading was suspended by SGX to “safeguard the interests of the markets as there could be circumstances that would result in the market not being fully informed,” according to a statement from the bourse.
Regulators around the world have stepped up oversight of capital markets after coming under scrutiny during the global financial crisis in 2008. The Monetary Authority of Singapore established a 13-member council in 2010 with a goal to boost corporate governance standards and investor confidence.
“The concern is that short sellers are taking advantage of the weak market sentiment,” Kelly Teoh, a strategist at IG Markets in Singapore, said by telephone. “It is a good thing that SGX shows it’s on top of everything. It is in the market interest to have some sort of a policing environment.”
Blumont, LionGold and Asiasons didn’t immediately reply to telephone calls and e-mails seeking comment.
Blumont had soared more than 1,000% this year through the end of September, prompting SGX to ask the company to explain the reason for the steep increase.
LionGold jumped 46% in August, touching a record intraday high of $1.755 on Aug 27, while Asiasons rose to $2.83 on Oct 1 for its highest-ever close.
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